The Department of Health and Human Services released a final rule on information blocking, aiming to enforce stricter penalties for healthcare providers who hinder the access to electronic health information (EHI). This new regulation exercises the HHS secretary’s authority under the 21st Century Cures Act and establishes disincentives for practices that interfere with, prevent, or materially discourage the use of electronic records, unless legally required or exempt. The measure targets providers found to have committed information blocking by the HHS Office of Inspector General, who then refer those cases to the Centers for Medicare and Medicaid Services.
Penalties under Medicare programs
CMS has outlined specific consequences for providers found guilty of information blocking within its various quality programs. Under the Medicare Promoting Interoperability Program, an eligible hospital or critical access hospital that commits information blocking and is referred to CMS will not be considered a meaningful electronic health record user during the reporting year. This lack of status prevents the facility from earning three quarters of the annual market basket increase typically available for successful participation. For critical access hospitals, payment will be reduced to 100 percent of reasonable costs rather than the standard 101 percent.
A similar disincentive applies to the Merit-based Incentive Payment System (MIPS). A MIPS eligible clinician who commits information blocking will receive a zero score in the Promoting Interoperability performance category for that calendar year. CMS clarified that this penalty applies to the individual provider, even if the clinician reports as part of a group practice. The effect of a zero score in this category is a negative payment adjustment to every Medicare claim for an entire payment year, which can significantly impact a practice’s revenue.
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Impact on value-based care programs
Healthcare providers participating in the Medicare Shared Savings Program face the most severe consequences. An Accountable Care Organization or ACO participant found to have committed information blocking may be ineligible to participate in the program for at least one year. This exclusion means the provider cannot receive any revenue they might otherwise have earned through the Shared Savings Program. CMS stated it will consider the circumstances surrounding the violation, such as the time since the conduct occurred and the provider’s diligence in correcting the problem, before applying this disincentive.
Practices already handling the complex reporting requirements of MIPS and other quality programs now face an additional layer of scrutiny. For a medical group already struggling to meet reporting thresholds, a zero score in the Promoting Interoperability category effectively nullifies any positive performance in other categories, dragging down the final MIPS score and resulting in substantial financial penalties across all Medicare claims for that year.
Future rulemaking and industry response
Additional disincentives may be established through future rulemaking. CMS released a proposed rule on information blocking penalties in October 2023, indicating that this final step is part of an ongoing regulatory evolution. The HHS Secretary emphasized that while access to information is critical, the rule also protects patient privacy and preferences.
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Anders Gilberg, the SVP of Government Affairs at MGMA, expressed disappointment with the finalized penalties. He noted that medical groups already face numerous difficulties reporting under MIPS and argued that a zero score in the Promoting Interoperability category ensures that offending groups will likely receive a negative payment adjustment to every Medicare claim for an entire payment year. Gilberg stated that HHS could have chosen to implement corrective action plans but instead finalized “unnecessarily punitive penalties that will financially damage practices and negatively impact Medicare patients.”
Such measures ensure that any entity obstructing the free flow of health data will face significant financial consequences. The administration hopes these strictures will encourage widespread adoption of electronic health records and interoperable systems.